In the world of business and personal interactions, negotiation is an essential skill. Whether you're trying to secure a better deal on a car, negotiate a salary increase, or hammer out the details of a complex business contract, knowing how to negotiate effectively can make a significant difference in the outcomes you achieve. Roger Dawson's "Secrets of Power Negotiating" offers a comprehensive guide to mastering the art of negotiation, providing readers with a wealth of strategies, techniques, and insights to help them become more successful negotiators.
This book is not just about learning a few tricks to get your way; it's about developing a deeper understanding of the negotiation process and the psychology behind it. Dawson breaks down negotiation into three distinct phases - the beginning, middle, and end - and provides specific tactics, or "gambits," for each phase. These gambits are strategic moves that, when used skillfully, can give you a significant advantage in any negotiation.
Throughout the book, Dawson emphasizes the importance of preparation, understanding your counterpart's perspective, and maintaining a win-win mindset. He argues that the best negotiations are those where both parties feel satisfied with the outcome, even if one side may have gained a bit more than the other.
Let's dive into the key ideas and strategies presented in "Secrets of Power Negotiating," exploring how you can apply these concepts to become a more effective negotiator in both your professional and personal life.
Beginning Gambits: Setting the Stage for Success
Ask for More Than You Expect to Receive
One of the most crucial beginning gambits in power negotiating is to ask for more than you expect to receive. This strategy helps you avoid one of the most common mistakes novice negotiators make: giving up too much ground too early in the negotiation.
For example, imagine you're buying a used car. The salesperson's asking price is $18,000, and your goal is to get them down to $15,000. If you start by offering $15,000, you've already given away most of the $3,000 difference before the negotiation has even begun. Instead, Dawson advises making an initial offer that's lower than your target price.
This approach establishes a wider negotiating range, which gives you more room to maneuver. If you make your initial offer low enough, your target price will end up being in the middle of the range. This is called "bracketing" - making an initial offer that turns your target price into the midpoint of the negotiating range.
In our car example, if you want to pay $15,000, you might start by offering $12,000. This brackets your target price, putting $3,000 of negotiating space on either side of it. If you and the salesperson meet halfway, you'll end up right at your target price of $15,000.
This principle applies equally to sellers. If you're selling a product and hoping to get $1.75 per unit, you might start by asking for $2.00, bracketing your target price with $0.25 on either side.
The Reluctant Seller (or Buyer)
Another powerful beginning gambit is playing the role of the reluctant seller or buyer. This involves pretending that you're much less eager to make the deal than you actually are.
If you're selling a property, for instance, you might tell the potential buyer that you're not even sure you want to sell because the property has sentimental value. This tactic can help narrow the negotiating range in your favor. The more you convince the buyer of your reluctance to sell, the less likely they'll be to make a low initial offer.
Conversely, if you're the buyer, you can act like a reluctant buyer. You might mention that you're considering many other options or that you're not in a hurry to make a purchase. This can tempt the seller to lower their asking price, narrowing the negotiating range in your favor.
The Power of the Flinch
Body language plays a crucial role in negotiation, and one of the most effective physical reactions you can use is the flinch. When the other party makes their initial offer, act visibly shocked or surprised, even if the offer is entirely reasonable.
For example, if you're buying a boat and the owner proposes an initial sale price of $10,000, you should react as if you're stunned by such a high number. This physical reaction communicates your disapproval of the price much more effectively than words alone. In some cases, a well-executed flinch might even prompt the other party to immediately lower their asking price.
On the other hand, if you don't flinch and maintain a neutral expression, the other party might interpret this as a sign that their price doesn't seem unreasonable to you. This could encourage them to stick closer to their initial asking price.
The Vise Technique
The vise technique is a simple yet powerful verbal gambit that involves using a specific seven-word phrase: "You'll have to do better than that." Here's how it works:
- Let your counterpart make their initial offer.
- In response, calmly say, "You'll have to do better than that."
- Then, wait for their next move.
The purpose of this gambit is to put the negotiating ball back in the other party's court. If they're an inexperienced negotiator, they might respond with a better offer, improving your negotiating range before you've even made a counteroffer.
However, if they're savvy, they might ask, "How much better do I have to do?" In this case, you'll need to be prepared to provide a specific counteroffer that establishes the negotiating range.
Remember, if someone tries to use the vise technique on you, you can counter by asking them to be more specific about what they're looking for.
Never Accept the First Offer
One of the cardinal rules of power negotiating is to never accept the other side's initial offer, even if it seems like a great deal. There are several reasons for this:
- You might be able to get an even better deal by negotiating further.
- Accepting too quickly can make the other party suspicious or regretful, potentially damaging the relationship or the deal itself.
- It denies the other party the satisfaction of feeling like they've won something in the negotiation.
For example, imagine you're buying a used car, and the seller immediately accepts your first offer. You might start wondering if there's something wrong with the car or if you could have gotten an even better deal. On the other hand, if the seller engages in a bit of back-and-forth negotiation before agreeing to your price, you're more likely to feel satisfied with the outcome.
Remember, in an ideal negotiation, both sides should leave feeling like they've won something. By refusing the first offer and engaging in some negotiation, you allow the other party to feel like they've achieved a victory, even if you end up getting exactly what you wanted.
Middle Gambits: Navigating the Heart of the Negotiation
Continuing to Bracket
As you move into the middle phase of negotiation, it's important to continue using the bracketing technique you established at the beginning. This means maintaining your target price as the midpoint of the negotiating range, even as that range narrows.
For instance, let's say you've offered to buy a house for $140,000, and the owner has countered with $200,000. Your bracketed target price is $170,000. If the seller comes down by $10,000, you should come up by no more than $10,000 to maintain the bracket. If they then come down by another $5,000, you should come up by no more than $5,000.
Tapering Your Concessions
While it's important to make concessions during a negotiation, you need to be strategic about how you do so. Dawson advises tapering your concessions, making them smaller as the negotiation progresses. This creates the impression that you're reaching your limit.
For example, if you're negotiating the price of a house, your concessions might look like this:
- First concession: $10,000
- Second concession: $5,000
- Third concession: $2,000
This tapering pattern sends a clear signal to the other party that you're approaching your maximum offer, making it less likely that they'll push for further large concessions.
The Trade-Off Gambit
One of the key strategies for the middle phase of negotiation is the trade-off gambit. The rule is simple: never make a concession without asking for something in return. Even if the concession costs you nothing, always request a trade-off.
For example, if you're selling a house and the buyer asks to move some furniture into the garage before taking ownership, you should ask for something in return, even if you don't care about the garage. You might say, "If I can give you what you're asking for, what will you give me in return?"
There are two main reasons for always requesting a trade-off:
- It's an opportunity to gain something in return for your concession.
- It sets a precedent that prevents the other party from becoming too greedy with their requests.
By consistently using the trade-off gambit, you encourage the other party to be more judicious and restrained with their demands.
Invoking a Higher Authority
When you're faced with a difficult request or a stubborn negotiator, the higher authority gambit can be a powerful tool. This involves pretending that there's another person or entity who has to approve any concession or decision you make.
For instance, you might say, "I'm not sure if I can convince my people to approve this deal without an additional charge." This accomplishes several things:
- It buys you time to think about the request.
- It takes the sting out of rejection, as you're just the messenger.
- It allows you to position yourself as an ally to the other party, working together against the "higher authority."
When using this gambit, keep the authority vague (e.g., "my people," "corporate," "the committee") to prevent the other party from trying to circumvent you and speak directly to the authority.
Bringing in a Third Party
If a negotiation becomes deadlocked, bringing in a third party can help break the impasse. This could be a neutral mediator or arbitrator, or even someone from your own side who can play the role of intermediary.
The benefit of bringing in a third party is that they can provide a fresh perspective and propose new solutions. Additionally, their words might carry more weight with the other party than yours, especially if the other party suspects you of having ulterior motives.
The Power of Walking Away
One of the most crucial secrets of power negotiating is being prepared to walk away from the deal and projecting your ability and willingness to do so. This is often referred to as your "walk-away power."
To project walk-away power, make it clear that you have alternative options. For example, you might mention other prospective clients or opportunities you're considering. This strengthens your negotiating position by showing the other party that you're not desperate to make this particular deal.
If the other party senses that you're unwilling to walk away, they'll be much more inclined to push their luck and stick to their demands. On the other hand, if they believe you might walk away, they'll be more likely to make concessions to keep the deal alive.
The Set-Aside Gambit
When you reach an impasse in a negotiation, it's often because of just one or a few issues among many. The set-aside gambit involves temporarily putting these sticking points aside and focusing on the areas where you can find agreement.
For example, if you're negotiating the terms of a custom-built product and you're stuck on the timeframe for designing the prototype, you could set that issue aside and work on other aspects like product specifications or payment terms.
The strategic purpose of this gambit is to build momentum and goodwill by reaching agreements on other issues. By the time you circle back to the sticking point, the other party may be more willing to compromise, not wanting to lose the progress you've made on other fronts.
End-Phase Gambits: Sealing the Deal
The Nibble
As you approach the end of a negotiation, the nibble can be an effective way to gain a small additional concession. This gambit involves asking for one last little extra just as the deal is about to be finalized.
For instance, if you're buying a used truck and you're about to sign the check, you might casually ask, "Oh, and the truck comes with a full tank of gas, right?" At this point, the seller may be so close to completing the sale that they'll agree to this small additional request rather than risk jeopardizing the deal.
However, be aware that the other party might try to use this tactic on you. To protect yourself:
- List out the costs of extra benefits in writing beforehand.
- Use the higher authority gambit to claim you're not authorized to grant the request.
- Gently call out the attempt to nibble with a good-natured comment like, "Come on, you've already gotten a great deal!"
Withdrawing an Offer
If the other party becomes too greedy or stubborn near the end of a negotiation, withdrawing an offer can be a powerful (though risky) way to bring things to a close. This gambit involves a two-step process:
- Tell the other side you need to check with your higher authority about their latest request.
- Return with bad news: not only has their request been denied, but your previous offer has to be rescinded as well.
For example, imagine you're selling widgets and have offered a price of $1.75 per unit. The buyer, pushing their luck, insists on $1.74. You might come back and say, "I'm sorry, but after running the numbers, we actually can't go below $1.80 due to increased material costs."
To soften the blow of this gambit:
- Act apologetic and embarrassed
- Hide behind a higher authority
- Provide a plausible excuse for the change
The shock of losing what they thought was a done deal often makes the other party eager to regain the original offer, effectively ending their attempts to push for more concessions.
Positioning for Easy Acceptance
After a hard-fought negotiation where you've gained significant concessions, the other party might be feeling beaten down and reluctant to admit defeat. To help them save face and feel good about accepting the deal, use the "positioning for easy acceptance" gambit.
This involves throwing in a small, no-strings-attached extra at the end of the negotiation. For example:
- If selling a car, you might include a set of snow chains.
- If selling equipment, offer to personally supervise the installation.
- If selling a product with a warranty, extend it by an additional year.
The freebie doesn't need to be large - the goal is simply to be the last person to give a concession. This allows the other party to feel like they've won the final victory, softening the blow of previous defeats and helping them feel good about accepting the deal.
Remember, don't gloat or reveal that they could have gotten a better deal. Instead, act as if they've gotten the better end of the bargain and congratulate them on their negotiating skills. This helps maintain goodwill and sets a positive tone for future interactions.
Key Principles of Power Negotiating
Throughout the book, Dawson emphasizes several overarching principles that are crucial for successful negotiation:
1. Preparation is Key
Before entering any negotiation, it's crucial to be well-prepared. This means:
- Researching the other party and their likely positions
- Understanding your own goals and bottom line
- Anticipating potential obstacles and preparing strategies to overcome them
- Having a clear idea of your alternatives if the negotiation fails
The more prepared you are, the more confident and effective you'll be during the negotiation.
2. Understand the Other Party's Perspective
Successful negotiation isn't just about pushing for what you want - it's about understanding what the other party wants and needs. Try to put yourself in their shoes and consider:
- What are their goals and motivations?
- What constraints or pressures might they be under?
- What alternatives do they have if this deal doesn't work out?
By understanding their perspective, you can find creative solutions that satisfy both parties' needs.
3. Maintain a Win-Win Mindset
While it's important to advocate for your own interests, the most successful negotiations result in both parties feeling satisfied with the outcome. Strive for solutions that create value for everyone involved. This approach:
- Builds stronger, long-term relationships
- Increases the likelihood of future deals
- Creates a positive reputation that can benefit you in other negotiations
4. Be Patient
Rushing to close a deal often results in suboptimal outcomes. Be willing to take your time, especially during the middle phase of negotiation. Patience allows you to:
- Gather more information about the other party's position
- Explore creative solutions
- Let the other party become more invested in reaching an agreement
5. Pay Attention to Non-Verbal Communication
A significant portion of communication in negotiation is non-verbal. Pay close attention to:
- Body language (yours and theirs)
- Tone of voice
- Facial expressions
- Timing and pacing of responses
These cues can provide valuable insights into the other party's true feelings and intentions.
6. Be Willing to Walk Away
As mentioned earlier, your willingness to walk away from a deal is one of your strongest negotiating tools. This doesn't mean you should be quick to abandon negotiations, but rather that you should:
- Know your alternatives if this deal doesn't work out
- Be clear about your bottom line
- Project confidence that you'll be fine even if this particular deal falls through
7. Practice Ethical Negotiation
While many of the gambits and strategies in power negotiating involve some level of strategic positioning or even bluffing, it's crucial to maintain ethical standards. This means:
- Never lying or misrepresenting facts
- Honoring your commitments once a deal is made
- Treating the other party with respect throughout the process
Ethical negotiation builds trust and reputation, which are invaluable assets in long-term business relationships.
Applying Power Negotiating Techniques in Various Contexts
While many of the examples in "Secrets of Power Negotiating" focus on business transactions, the principles and techniques can be applied in a wide range of situations:
Business Negotiations
In business contexts, power negotiating can be used in:
- Sales transactions
- Contract negotiations
- Mergers and acquisitions
- Supplier agreements
- Employee hiring and salary negotiations
The key is to adapt the gambits to fit the specific situation and relationship dynamics at play.
Personal Negotiations
Power negotiating techniques can also be valuable in personal situations, such as:
- Buying or selling a home
- Negotiating with service providers (e.g., contractors, mechanics)
- Resolving disputes with neighbors or family members
- Negotiating terms of a rental agreement
Remember to adjust your approach based on the nature of the relationship and the long-term implications of the negotiation.
International Negotiations
When negotiating across cultures, it's important to:
- Research cultural norms and expectations around negotiation
- Be aware of different communication styles and potential misunderstandings
- Adapt your gambits to fit cultural expectations
- Be patient and willing to invest time in relationship-building
Negotiating in Teams
Many negotiations, especially in business contexts, involve teams rather than individuals. When negotiating as part of a team:
- Clearly define roles and responsibilities beforehand
- Establish signals for when you need to confer privately
- Present a united front to the other party
- Use the diversity of your team to your advantage (e.g., good cop/bad cop dynamics)
Developing Your Negotiation Skills
Becoming a skilled negotiator takes time and practice. Here are some ways to develop your negotiation skills:
- Study negotiation theory and techniques (as you're doing by reading this book)
- Practice negotiating in low-stakes situations (e.g., at flea markets or yard sales)
- Reflect on your past negotiations to identify areas for improvement
- Role-play negotiations with friends or colleagues
- Observe skilled negotiators in action when possible
- Seek feedback on your negotiation style from trusted mentors or peers
- Stay updated on industry trends and market conditions relevant to your negotiations
Conclusion
Roger Dawson's "Secrets of Power Negotiating" provides a comprehensive toolkit for becoming a more effective negotiator. By mastering the gambits and principles outlined in this book, you can approach negotiations with greater confidence and achieve better outcomes.
Remember that negotiation is both an art and a science. While these techniques and strategies provide a solid foundation, successful negotiation also requires adaptability, emotional intelligence, and the ability to read and respond to the unique dynamics of each situation.
As you apply these power negotiating techniques in your professional and personal life, keep in mind that the ultimate goal is not to "win" at the expense of the other party, but to create mutually beneficial agreements that strengthen relationships and create long-term value.
By consistently applying these principles and refining your skills through practice and reflection, you can become a formidable negotiator capable of navigating even the most challenging situations with confidence and success.